The transition to EMV chip-cards in the U.S. hasn’t exactly been an easy one. Even by the “liability-shift” deadline in late 2015, many retailers hadn’t even migrated to terminals that have a chip-card slot, let alone with the software to process chip cards. Even now in 2017, chip readers aren’t working at many stores. Often, I insert my card, only to have the checker tell me to swipe it, the hint of annoyance in his voice unmistakable. It is probably the 73rd time he has had to say that to someone that day.

Although the roll-out of chip card technology in the U.S. has been less than ideal, can’t we count on greater security using the EMV technology? The short answer: yes and no.

The promise behind the move to chip cards was to make credit card use safer, but thus far the transition has mostly failed to deliver. Because retailers were not required to move over to the new technology, many still haven’t, especially if they process fairly low-risk transactions. Why go through the headache of changing technology if what you have is working fine?

Even so, chip cards have made consumers safer in some ways. There as been a decrease in the amount of counterfeit credit card fraud, as card information called be easily extracted from the chip like it can from the magstripe. But fraudsters have compensated by shifting into substantially more new account fraud, as well as using faked cards at retailers that have yet to move to the chip readers.

EMV technology is meaningless for “card not present” transactions

A major issue is that the security offered by chips cards is meaningless when it comes to “card not present” (think online) transactions. If someone has all your card info, including card number, expiration date, cardholder name, and security code, that is enough to buy from most online retailers. And guess what? The number of online purchases continues to rise. The net effect? More potential for fraud.

I’ve had my share of card fraud over the past couple years. I think a total of 5 of my accounts have been compromised, the bulk of them being Chase cards (I don’t know if this was coincidental or not). One of the primary reasons I use a credit card (besides for points, of course) is the fact that I am protected from fraudulent transactions. In every case I’ve had to dispute transactions as fraudulent, the bank has taken care of the charges. The near-zero liability of using a credit card is one reason I *never* use my debit card unless I absolutely have to. So much so that when I *actually* need to use my debit card, I can’t ever remember my pin!

How can you protect yourself from fraud?

Here are a few basic tips to protect yourself from credit card fraud:

Use the services offered by your bank or card issuer. Some of these include SMS or email alerts for “card not present” transactions, or for purchases over a certain amount.

Monitor your accounts at least weekly. It pretty easy to log in and keep tabs on your transactions. I caught over $2,000 in airfare and hotel purchases this way on one of my cards and was able to alert Chase immediately.

Act immediately if you realize an account is compromised. This will give fraudsters less time to use your credit card information.

The incidence of credit card fraud will hopefully decline as more retailers make the transition to chip-enabled terminals. But even then, fraudsters will still find a way. One industry professional likened stopping fraud to “squeezing Jell-O.” in other words, you may stop it in one place, but it’ll just move elsewhere.

How can u write on this sopic without mentioning chip+pin which prevails throughout Europe? Absence of PINs makes the chips much less useful at deterring fraud – but US banks vehemently oppose this simple common sense solution

I considered it, but there was enough to discuss without dragging the “what they should have done” into the post. It is true that a PIN would be more secure for in-person transactions, but the fact that the PIN does nothing for CNP transactions remains the same. And “card not present” fraud continues to rise.

I hardly ever use the chip. Pretty much everywhere I shop regularly (e.g. Costco, Vons, gas stations) still swipe. The other places take Apple Pay or some other form of contactless payment (e.g. RiteAid, Starbucks). On the rare occasion the chip is used, it’s always a hassle because it’s so slow.

Way too short of an article. As to watching your cards, you left out an easier way vs checking online. Set up email alerts to spending and you see everything in real time. I caught fraud on a card I rarely use that way.

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About Me

Dan Miller travels with his wife and 6 (SIX!) children. He loves to help families travel for free / cheap, especially larger families. If you are looking for help, drop him an email at dan@pointswithacrew.com.